Investor best buys for under $500,000 revealed

For investors with $500,000 to spend, a new report outlines the best suburbs in which to invest at this price point.

The analysis, conducted by Herron Todd White (HTW), encouraged investors in the Sydney market to focus on the eastern suburbs.

“Specifically the inner eastern corridor from Surry Hills, through Darlinghurst to nearby Potts Point, where you can still purchase studio and some one-bedroom units for under $500,000,” the report states.

Units in this region bring in strong rental returns and often present opportunities to add value, HTW suggests.

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In western Sydney, investors should consider Blacktown, St Clair, Colyton and St Marys.

"Since the last time we spoke about the circa $500,000 range in western Sydney, prices surged between 8 per cent and 15 per cent depending on the suburb, as per [Australian Property Monitors] APM," the report states.

In Melbourne, outer northern suburbs such as Bundoora and Epping are highlighted for their public transport connections and educational facilities.

“A strong demand for housing is expected in both suburbs in the coming years, owing to the increase in private and government developments,” the report states.

For Brisbane, the analysis suggests investors search for detached housing within 10 kilometres of the CBD, and strong underlying fundamentals, such as Mount Gravatt.

Alternatively, investors could consider apartments in the inner city.

“The lazy $500,000 will also find you something in New Farm or Newstead, which are steaming hot locations,” the report states.

In Western Australia, Bassendean in Perth is given as an example of a middle-ring suburb with strong growth potential.

“Our recommendation is to look at areas like this that are close to public transport links, amenity (shops, cafes), have an ageing population with older housing stock, located on larger, traditional sized lots,” the report states.

In the regions, the authors said the suburb of Busselton is increasing in desirability and affluence.

"Consequently, this will result in good capital growth over the medium to long term because an increase in population will lead to stronger demand of a product that has limited scope to increase in supply," the report states.